Redefining businesses around technology to maximize the bottom-line

Across all businesses, no matter the size or the industry, is the desire to optimize resources so bottom-line results are maximized.?

With the global economic context being characterized by inflationary pressures, business leaders and chief financial officers are seeking to understand ways to prevent falling short of executive expectations as well as how technology can be used to close those gaps.?

When doing the strategic groundwork for this, an obvious starting point people gravitate towards is cost cutting.

The relationship between costs and investments?

If one looks at the market and sees that the trajectory for consumption is drastically reduced, that’s a clear sign greater expense management is needed. This also needs to be considered in tandem with the long-term investment goals of the business.?

The question which then emerges revolves around whether the investments were too aggressive? Or if they were well thought out in relation to the greater scheme of profit over loss?

But I think the better place to focus for every business is investment. Whether its investment focused on oneself (e.g. license updates, continued learning, etc.) or investments from external partners and sources, businesses need to know where the peaks and troughs emerge.?

They need to then strategize how to transcend the troughs as they are inevitable experiences for all businesses. Using them as indicators for where new lessons can be learned can help minimize the negative impact they have on bottom-line results.?

The next step is to then analyze the performance of any new initiatives which are yet to draw in significant revenue. Based on the findings, there are usually opportunities to adjust KPIs, and improve overall strategy to generate better performance.?

But how does an organization know what needs to be cut, and when??

Low-to-no revenue? The dynamics of making a cut?

It goes without saying that making a cut is rarely a simple process. Often, there are legacy systems and solutions attached to it and so a step-by-step process of refinement is preferred over an immediate reduction.??

Generally, I believe that if a business can reassign, it’s better to move in that direction than to cut. If I use the example of a business changing their sales outreach strategy, a cut is quite disruptive from an operational standpoint as well as, of course, to the individuals in the team.?

In the past, I’ve been aware of companies that repeatedly deleted their sales outreach strategy to make way for an entirely new approach that the business had no previous experience in implementing. Because there was so much change at once, it was difficult keeping everyone on the same page as well as discerning the effectiveness of the changes on bottom-line results.?

In this example, it may have been better for the company to make incremental adjustments to the strategy and monitor results over time rather than completely chop and change for something new. It gives the business time to adjust as well as insight into the precise aspects of the strategy that weren’t delivering.??

In terms of pinpointing the time to make changes, it’s often on the back of a steep growth period, where the trajectory falters faster than anyone could have ever predicted. This is the green-light for transformation to take place.?

In an ideal world, a business would have strategies in place to prevent such a stark turn of events. But as we’ve seen with the pandemic over the past few years, there are some circumstances no one is ever completely prepared for.?

In addition to the individual performance of the business itself, time needs to be taken to observe changes in government spending and resource allocation. As the economy grows and opens out in new directions, businesses need to adapt to those outside influences and map growth strategies accordingly. Because the fact is, if it doesn’t earn money, it becomes a cost.?

Almost as soon as new policies come in, sales teams need to either retract or redefine delivery-to-market to remain in motion. Businesses that don’t do this - that continue “business as usual” for too long - find themselves lagging behind competitors and become increasingly unappealing to prospective customers.?

Businesses need to be prudent enough to look at the next 12 to 18 months and decide where investments, cuts and resources are best made. This puts businesses in the best standing to adapt to any market changes. ?

The role of technology: Closing the gaps?

Fundamentally, the point of technology is to assist the user or the business to be more efficient. The process of becoming more efficient isn’t contingent on the mere deployment of technology (e.g. replacing a manual reporting system with automation technology) but is instead a mindset businesses need to adopt.?

For instance, a business that seeks to increase cost savings over the long term will need to make short-term cost reductions to the current technology in use.?

This requires businesses to analyze their end-to-end service delivery model and ask:

• At what stages do errors most frequently occur??
• What actions take people away from their core responsibilities (what they would prefer to focus on)??
• Is there a way for workers to better optimize their time through a simple readjustment of resources and personnel??

As an example, let’s consider the service delivery model of a warehouse that needs to deliver lots of orders (which have been made online). In a big warehouse, where lots of packaged orders look the same, there’s a risk an order will be lost or incorrectly placed. That’s why an automation system for registering and tracking orders is optimal in this instance. It enables warehouse operators to accurately pinpoint the entry, storage, delivery and retrieval of orders with just a few clicks over a few seconds.?

In this example, the deployment of technology (the automation system) is driven by the needs of the business, which is the guarantee of delivery in a certain time for a certain cost. The warehouse manager isn’t told “improve your warehousing to be more efficient.” Instead, a solution is developed to address the specific pain point of the company (being able to easily keep track of orders). ?

I’ve spoken before about how technology doesn’t need to be complex, just beneficial. Analyzing the service delivery model from a holistic perspective (as opposed to thinking about technology in isolation of itself) will help expose the challenges that a business has with efficiency.?

When a business can diagnose problems with efficiency and ideate a solution to make the process smoother, the business is equipped to be more productive. This is the state all businesses need to be in to generate an improved bottom-line.?